Clean Harbors (CLH) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue increased 12% year-over-year to $1.53 billion, driven by strong Environmental Services growth, Field Services performance, and contributions from the HEPACO and Noble Oil acquisitions.

• Net income for Q3 2024 rose 26% to $115.2 million, with diluted EPS of $2.12, and Adjusted EBITDA grew 18% to $301.8 million, with margin expansion in both segments.

• Environmental Services segment delivered record volumes, margin improvement, and continued positive pricing momentum, while SKSS improved but underperformed expectations due to base oil market headwinds.

• Integration of recent acquisitions is progressing well, contributing to improved SG&A as a percentage of revenue and segment growth.

• Commercial launch of the Kimball, Nebraska incinerator is scheduled for November, expanding hazardous waste capacity.

Financial highlights

• Q3 2024 income from operations was $192.3 million, up 25% year-over-year; gross profit reached $473.8 million with a 31.0% margin.

• Adjusted EBITDA margin improved to 19.7% from 18.7% year-over-year.

• Adjusted free cash flow for Q3 was $144.5 million, up from $114.7 million in the prior year.

• Cash from operations totaled $239 million in Q3; cash and short-term marketable securities at quarter-end were $595 million.

• CapEx for Q3 was $94.7 million, including $20 million for the Kimball incinerator; year-to-date spend for Kimball is just over $60 million.

Outlook and guidance

• Full-year 2024 Adjusted EBITDA guidance revised to $1.10–$1.12 billion, representing 10% year-over-year growth.

• Adjusted free cash flow guidance set at $280–$320 million, reflecting higher working capital and project spending.

• Anticipated GAAP net income for 2024 is $375–$395 million.

• ES segment expected to see 13%-15% Adjusted EBITDA growth for 2024; SKSS segment now guided to a 12%-14% decrease in Adjusted EBITDA due to ongoing market pressures.

• Positive trajectory anticipated for 2025, with mid-single-digit organic revenue growth and mid- to high-single-digit Adjusted EBITDA growth expected, assuming stable macro conditions.